Victoria concern at FBT changes

THE Victorian government says federal changes to FBT for car usage could have a major impact on the state's health services and should be repealed.

AAPAugust 9, 20133:11pm

VICTORIA'S public health sector could face a $20 million bill and the loss of key staff to private industry under fringe benefits tax changes for car use, the state government says.

The Rudd government is doing away with the 20 per cent statutory rate and will require people to log business use of a private car, in a move expected to save about $1.8 billion.

Victorian Health Minister David Davis says public sector health workers are lower paid and cars are widely included in salary packages to help attract and retain key staff.

"We don't have final figures across the Victorian sector, but is pretty clear that the direct impact will be very significant - more than $20 million a year in Victoria at a minimum," he said.

"And if employees were compensated across a whole industry sector to do that, it could be more than $300 million a year ... (because) you may be forced into compensating right across a whole sector."

Mr Davis said doctors, nurses and other health professionals might also be lost to higher-paying jobs in the private sector.

He said Prime Minister Kevin Rudd had not thought through the implications of the changes, which would have a similar impact on the non-for-profit, aged care and community sectors, and should repeal it immediately.

Mr Davis also said he feared further tax changes under a Rudd government could be lurking in a yet-to-be released final report into tax concessions for the not-for-profit sector.

He said a working group discussion paper released last November raised concerns among the states that further benefits that help the sector retain staff would be taken away.

"They've come back with a final report which has been kept secret by the federal government and that report carries on its back the future of the health sector, the not-for-profit sector, the community sector," he said.

Mr Davis called on the prime minister to release the report before the election and reveal whether he would implement any of the report's recommendations.